1) Consider the following demand and supply equationsfor sugar:Qd=1,000-1,000PQd=1,000-1,000PQs=800+1,000PQS=800+1,000Pwhere PP is the price of sugar per pound and QQ is thequantity of sugar in thousands of pounds.a) What are the equilibrium price and quantity for sugar?b) Suppose the government subsidizes sugarproduction by placing a price floor of $0.20 per pound.What is the relationship between the quantity suppliedand quantity demanded for sugar?

Here we calculate the following equilibrium price and quantity and effect of subsidy on quantity…

Answered: 1) Consider the following demand and…

1) Consider the following demand and supply equations for sugar: Qd=1,000-1,000PQd=1,000-1,000P Qs=800+1,000PQS=800+1,000P

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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What is the formula for measuring the price elasticity of supply? Es = (Click to select)percentage change in quantity supplied / percentage change in pricepercentage change in quantity demanded / percentage change in incomepercentage change in quantity demanded / percentage change in price Suppose the price of apples goes up from $20 to $23 a box. In direct response, Goldsboro Farms supplies 1300 boxes of apples instead of 1200 boxes. Compute the coefficient of price elasticity (midpoints approach) for Goldsboro’s supply. Instructions: Round your answer to two decimal places. Es = Is its supply elastic, or is it inelastic? Supply is (Click to select)elasticinelastic.
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